Doing Business in Egypt Challenges & Opportunities Athanassios - PowerPoint PPT Presentation

Doing Business in the Arab World Arab Hellenic Chamber of Commerce & Development (Athens, 22.3.2017) Doing Business in Egypt Challenges & Opportunities Athanassios Makrandreou Minister Plenipotentiary (Economic & Commercial Affairs) Embassy of Greece in Cairo

EGYPT: Basic macroeconomic data Fiscal year: July/June 2013/14 2014/15 2015/16 Recent GDP (in EGP trillion. – current prices) 2,102 2,444 2,708 GDP (in EGP trillion – fixed prices 2011/12) 1,729 1,838 1,917 Real GDP change (%) 2,2% 4,4 % 4,3% Inflation (end of June, %) 8,20% 11,39% 13,97% 31,7% Unemployment (%) 13,0% 12,8% 12,7% Exports ($ billion) 26,02 22,24 18,70 10,4* Imports ($ billion) 60,18 61,30 57,39 28,3* Trade balance ($ billion) -34,16 -39,06 -38,68 -17,9* Trade balance (% GDP) -11,2% -11,7% -11,5% Current account balance ($ billion) -2,78 -12,14 -19,83 -9,4* Current account balance (% GDP) -0,9% -3,6% -5,9% Net international reserves ($ billion) 16,69 20,08 17,55 26,54 Fiscal deficit (% GDP) 12,2% 11,5% 12,3% 5,4% Net foreign direct investment ($ billion) 4,18 6,38 6,93 7,4 Foreign debt ($ billion) 46,07 48,06 55,76 Foreign debt (% GDP) 15,4% 14,8% 18,1% Domestic debt (EGP trillion) 1,817 2,116 2,620 Average exchange rate against $ 7,14 7,53 8,78 18,1 Source: Central Bank of Egypt (CBE) * 1 st half 2016/2017 Others: February

Main macroeconomic issues (1)  Serious decrease in the inflows of FDI, foreign tourism and remittances from Egyptians abroad during the post-2011 period  Dramatic decrease in foreign exchange inflows, leading to serious shortages & creating problems in trade and investor payments, which had a negative impact on the overall business climate  Fiscal imbalances due to decreased revenues and adherence to social support expenditure  Although situation is improving slowly, market inadequacies & shortages of some goods in the domestic market are still present, mainly due to the insufficiencies in foreign exchange availability

Main macroeconomic issues (2)  Economic reform program implemented by the Government and backed by the IMF – Support from World Bank  Introduction of VAT in September 2016, floating of the exchange rate regime of the Egyptian pound in November 2016  The Egyptian Government is formulating strategies for invigorating the domestic industry and exports, as well as attracting foreign investment  Rationalization of the economy – cuts on subsidies – focused social support – cut red tape  Improvement in basic economic indices generate optimism  Revenue expectations from the giant natural gas findings encouraging to the economy – Start of production end of 2017  Megaprojects materialization – a real booster

Advantages of Egypt as our business partner  Strategic position in the Mediterranean  Strategic position in the Middle East and Africa  The biggest market in the Arab world  The most stable country in the region  Greece’s gate to the broader region  Long term growth forecasts + Africa perspectives

Bilateral Trade Greece-Egypt 2012-2016 In million € 2012 2013 2014 2015 2016 2015/16 % Exports 345,39 548,74 753,20 1.042,98 750,07 -28,1 Imports 444,39 578,44 843,63 657,37 577,02 -12,2 Trade Volume 789,78 1.127,18 1.596,83 1.700,35 1.327,09 -22,0 Trade Balance -99,00 -29,70 -90,43 385,61 173,05 -55,1 Source: HELLENIC STATISTICAL AUTHORITY (ELSTAT)

Bilateral Trade Greece-Egypt 2012-2016 In million € 1,200.00 1,042.98 1,000.00 843.63 753.20 750.07 800.00 657.37 578.44 548.74 577.02 Exports 600.00 Imports 444.39 385.61 Trade Balance 345.39 400.00 173.05 200.00 0.00 2012 2013 2014 2015 2016 -29.70 -90.43 -99.00 -200.00 Source: HELLENIC STATISTICAL AUTHORITY (ELSTAT)

Top 20 Greek products exported to Egypt (2016) EXPORTS 2016 CHANGE 2015/16 CN4 PRODUCT DESCRIPTION VALUE ( €) QUANTITY (KG) % VALUE % QUANTITY Petroleum oils and oils obtained from bituminous 2710' 492.017.547 1.405.701.436 -34,7% -10,3% minerals, other than crude 5201'Cotton, not carded or combed 55.425.132 39.282.464 6,5% 2,3% Petroleum coke, petroleum bitumen and other residues of 2713' 51.863.560 392.684.959 -40,4% -18,6% petroleum oils 2711'Petroleum gases and other gaseous hydrocarbons 34.831.901 120.821.659 484,1% 607,4% 0808'Apples, pears and quinces, fresh 17.404.312 48.128.338 -22,2% -8,7% Cigars, cheroots, cigarillos and cigarettes, of tobacco or of 2402' tobacco substitutes 11.073.961 1.168.283 -8,4% -13,7% 1101'Wheat or meslin flour 5.888.702 14.382.900 -12,0% -10,8% Paper and paperboard, coated on one or both sides with kaolin 4810' 5.716.438 14.551.212 -17,2% -4,5% Fruit, nuts and other edible parts of plants, otherwise prepared or preserved 2008' 3.875.657 4.743.256 7,7% 7,0% 2401'Unmanufactured tobacco; tobacco refuse 3.376.722 1.295.496 34,8% 23,4% Synthetic organic colouring matter, whether or not chemically defined 3204' 3.268.200 2.074.813 3,3% -3,1% Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more 7210' 2.610.458 4.557.499 8,3% 25,4% Articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics 3923' 2.452.657 477.415 15,6% 17,1% Parts suitable for use solely or principally with internal 8409' combustion engines 2.351.909 84.556 -25,1% -8,0% Granulated slag (slag sand) from the manufacture of iron 2618' or steel 2.246.484 59.932.000 2527,5% 6559,1% 1507'Soya-bean oil and its fractions, whether or not refined 2.179.000 2.824.170 Ø Ø Apricots, cherries, peaches (including nectarines), plums 0809' 2.108.680 5.214.895 -43,5% -24,9% and sloes, fresh Rosin and resin acids, and derivatives thereof; rosin spirit 3806' 2.065.396 1.223.000 101,5% 118,7% and rosin oils; run gums: Printed books, brochures, leaflets and similar printed 4901' matter 1.866.820 258.299 -17,2% -15,8% Tableware, kitchenware, other household articles and 3924' hygienic or toilet articles, of plastics 1.777.425 112.461 -81,2% -81,7%

Top 20 products imported from Egypt (2016) IMPORTS 2016 CHANGE 2015/16 CN4 PRODUCT DESCRIPTION VALUE ( € ) QUANTITY (KG) % VALUE % QUANTITY Petroleum oils and oils obtained from 2709' 411.817.536 1.360.056.855 -18,8% -4,6% bituminous minerals, crude 3102' Mineral or chemical fertilisers, nitrogenous 39.579.519 176.199.941 25,0% 72,1% Petroleum oils and oils obtained from bituminous minerals, other than crude 2710' 30.926.499 68.800.606 154,5% 176,6% 0701' Potatoes, fresh or chilled 14.502.087 46.403.800 -16,9% -17,0% Acyclic alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives 2905' 14.429.729 71.797.122 198,9% 336,8% Polymers of ethylene, in primary forms 3901' 4.885.041 4.331.140 -1,4% 6,5% 2711' Petroleum gases and other gaseous 4.380.670 12.361.466 -55,2% -45,8% Natural sands of all kinds, whether or not 2505' coloured 3.183.610 110.718.461 5,0% 2,0% Vegetables (uncooked or cooked by steaming or boiling in water), frozen 0710' 3.095.286 1.338.086 -2,4% -1,3% Bedlinen, table linen, toilet linen and kitchen 6302' linen 3.083.896 514.325 24,6% 19,3% Salt (including table salt and denatured salt) and pure sodium chloride 2501' 3.057.354 113.696.510 -7,3% 4,4% Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more 7210' 2.498.869 5.112.125 29,9% 37,4% Other plates, sheets, film, foil and strip, of plastics 3920' 2.341.643 1.320.515 -30,9% -16,9% Other vegetables prepared or preserved 2005' otherwise than by vinegar or acetic acid 2.310.160 1.955.954 214,2% 256,4% Leather further prepared after tanning or 4107' crusting 2.150.606 136.650 81,7% 97,2% 3104' Mineral or chemical fertilisers, potassic 1.965.143 3.851.800 101,1% 136,5% Toilet or facial tissue stock, towel or napkin 4803' stock and similar paper 1.921.669 2.028.778 18,2% 21,2% Mineral or chemical fertilisers, phosphatic 3103' 1.392.442 7.563.625 17611,0% 14512,9% Wood charcoal (including shell or nut charcoal) 4402' 1.358.705 3.811.201 1,2% 6,1% Polymers of vinyl chloride or of other 3904' halogenated olefins, in primary forms 1.351.159 1.998.000 -46,4% -40,2%

Top growth Greek products exported to Egypt (2016)  Cotton  Natural gas  Prepared & preserved fruits  Unmanufactured tobacco  Synthetic organic coloring materials  Flat-rolled products of iron & steel  Plastic packaging materials  Granulated slag  Soya-bean oil (new entry, 2016)  Rosin & resin acids

Traditional top product categories of Greek exports to Egypt • Mineral fuels & oils (Chapter 27) • Cotton (Chapter 52) • Edible fruits & nuts (Chapter 08) • Tobacco & manufactured substitutes (Chapter 24) • Plastics & articles thereof (Chapter 39) • Machinery & equipment (Chapter 84) • Salt, sulphur, earth & stones (Chapter 25) • Paper, paperboard, articles of paper pulp (Chapter 48) • Products of the milling industries (Chapter 11) • Fertilizers (Chapter 31) • Preparations of vegetables, fruits & nuts (Chapter 20) • Chemical products (Chapter 38) • Tanning & dyeing extracts, dyes, pigments (Chapter 32) • Iron & steel (Chapter 72) • Vehicles, parts & accessories (Chapter 87) • Electrical machinery, equipment & parts (Chapter 85) • Products of the printing industry (Chapter 49)